TaxPersonal TaxTMA 1970, s 86

TMA 1970, s 86

[86 Interest on overdue income tax and capital gains tax

(1) The following, namely –
(a) any amount on account of income tax which becomes due and payable in accordance with section 59A(2) of this Act, and
(b) any income tax or capital gains tax which becomes due and payable in accordance with section 55 or 59B of this Act,
shall carry interest at the rate applicable under section 178 of the Finance Act 1989 from the relevant date until payment.
(2) For the purposes of subsection (1)(a) above the relevant date is whichever of the dates mentioned in section 59A(2) of this Act is applicable; and for the purposes of subsection (1)(b) above the relevant date is –
(a) in any such case as is mentioned in subsection (3) of section 59B of this Act, the last day of the period of three months mentioned in that subsection; and
(b) in any other case, the date mentioned in subsection (4) of that section.
(3) Subsection (1) above applies even if the relevant date is a non-business day within the meaning of [section 92]2 of the Bills of Exchange Act 1882.
(4) Subsection (5) below applies where as regards a year of assessment –
(a) any person makes a claim under subsection (3) or (4) of section 59A of this Act in respect of the amounts (the section 59A amounts) payable by him in accordance with subsection (2) of that section, and
(b) an amount (the section 59B amount) becomes payable by him
[(i)]3 in accordance with section 59B(3), (4) or (5) of this Act [or]3
[(ii) in accordance with section 59B(6) of this Act in respect of income tax assessed under section 29 of this Act.]3
(5) Interest shall be payable under this section as if each of the section 59A amounts had been equal to –
(a) the aggregate of that amount and 50 per cent of the section 59B amount, or(b) the amount which would have been payable in accordance with subsection (2) of section 59A of this Act if the claim under subsection (3) or (4) of that section had not been made,whichever is the less.
(6) In determining for the purposes of subsections (4) and (5) above what amount (if any) is payable by any person in accordance with section 59B(3), (4) or (5) of this Act [or, in respect of income tax assessed under section 29 of this Act, in accordance with section 59B(6) of this Act]4 –
(a) it shall be assumed that both of the section 59A amounts have been paid, and(b) no account shall be taken of any amount which has been paid on account otherwise than under section 59A(2) of this Act or is payable by way of capital gains tax.
(7) Subsection (8) below applies where as regards any person and a year of assessment –
(a) amounts (the section 59A amounts) become payable by him in accordance with section 59A(2) of this Act, and
(b) an amount (the section 59B amount) becomes repayable to him in accordance with section 59B(3), (4) or (5) of this Act.
(8) So much of any interest payable under this section on either of the section 59A amounts as is not attributable to the amount by which that amount exceeds 50 per cent of the section 59B amount shall be remitted.
(9) In determining for the purposes of subsections (7) and (8) above what amount (if any) is repayable to any person in accordance with section 59B(3), (4) or (5) of this Act, no account shall be taken of any amount which has been paid on account otherwise than under section 59A(2) of this Act or is payable by way of capital gains tax.]1

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